A New And Different Housing Bubble Is Taking Shapehttp://www.businessinsider.com/housing-bubble-ii-but-this-time-its-different-2013-3/comments
en-usWed, 31 Dec 1969 19:00:00 -0500Tue, 03 Mar 2015 18:53:02 -0500Wolf Richterhttp://www.businessinsider.com/c/5151c85cecad04a238000002RilesTue, 26 Mar 2013 12:10:04 -0400http://www.businessinsider.com/c/5151c85cecad04a238000002
The really scary part is that all of the Fed pumping is not having a much larger impact. If you were to chart a path overlapping the last real estate bubble, we be well into 2005, but we've yet to see the kind of appreciation we saw in 2002-2007 nationwide. This tells me the last bubble has never really fully deflated. We failed to liquidate the debt of the last bubble, and the bubble before that, preferring instead to make "soft landings". The problem is we've never landed. Valuations are still in the clouds. I think we're in for an enourmous bust in multiple sectors, and we may have used up whatever capital we had with foreign bondholders the last time around. I personally don't think China has the stomach for another US bailout.http://www.businessinsider.com/c/5151c2a469bedd2475000009Daniel AndrizziTue, 26 Mar 2013 11:45:40 -0400http://www.businessinsider.com/c/5151c2a469bedd2475000009
Completely ludicrous article written by a paranoid, non-REAL ESTATE informed pony, disguised as an author, doing his one-trick: scare tactics. BTW, I am a "1%-er", Republican-converted libertarian, completely against the bailouts, Fannie Mae GFE status, etc. As a front-lines real estate professional (nothing else- not a self-proclaimed economist, etc.)... the one thing I can speak to is the real estate portion of this article. It is simple supply and demand. In our market, the bidding wars and frenzy are 80% owner-occ, 20% onesy-twosy investors. This is NOT an artificial bubble; what we had in the early to mid-2000's absolutely was,and was fraudulent to boot. So, from one who is most likely on the same side of the capitalist fence as this author- this is pure bootleg garbage. If you want to understand your local market, talk to your local real estate professional. :) Have a great day all!http://www.businessinsider.com/c/5151c26decad043e2b000011Daniel AndrizziTue, 26 Mar 2013 11:44:45 -0400http://www.businessinsider.com/c/5151c26decad043e2b000011
Completely ludicrous article written by a paranoid, non-REAL ESTATE informed pony, disguised as an author, doing his one-trick: scare tactics. BTW, I am a "1%-er", Republican-converted libertarian, completely against the bailouts, Fannie Mae GFE status, etc. As a front-lines real estate professional (nothing else- not a self-proclaimed economist, etc.)... the one thing I can speak to is the real estate portion of this article. It is simple supply and demand. In our market, the bidding wars and frenzy are 80% owner-occ, 20% onesy-twosy investors. This is NOT an artificial bubble; what we had in the early to mid-2000's absolutely was,and was fraudulent to boot. So, from one who is most likely on the same side of the capitalist fence as this author- this is pure bootleg garbage. If you want to understand your local market, talk to your local real estate professional. :) Have a great day all!http://www.businessinsider.com/c/51513b896bb3f7ca1d000005r dTue, 26 Mar 2013 02:09:13 -0400http://www.businessinsider.com/c/51513b896bb3f7ca1d000005
there's no need for a lack of mercy and compassion but as this article suggests when we don't let the risk taker suffer the results of a bad risk it costs us for a much longer span of time. we have the potential here to stay in a depressed economy with no real wage growth or wealth accumulation by the middle class for another 5+ years because of the fed and other govt actions. i believe they really mean to help people when their lives get in roller coaster mode but it prolongs the cycle and this article is saying it creates another down cycle. these kinds of situations bring the usa to the final doorstep of socialism because the govt is so deeply involved in the running of these industries that pretty soon the politicians are just going to say 'why don't we simply own the whole enchilada and then we can take better care of the people'. in case you've missed it, the problem with socialism is that in the end you lose all real and valuable freedoms and your ability to control your own life's destiny as the state sets all the rules and owns all the chips. it has never worked well for the 'masses' and it never will.http://www.businessinsider.com/c/5150565969bedd9251000001JGaltMon, 25 Mar 2013 09:51:21 -0400http://www.businessinsider.com/c/5150565969bedd9251000001
I agree with Chris. Some upside down homeowners are asking for principal reduction. Funny, they don't ask for principal INCREASES when the opposite occurs, and housing values increase. But it a bank lowers the balance, the bank (ie, the investor, who took the risk initially) should get a second (or third...) on the home for the amount of the concession. Make is a silent second, even, interest rate = 0%. Then if/when the owner sells later for a profit, the loanmaker/investor will get repaid. If it never recovers and forecloses anyway, it would be wiped out. Why are investors taking all the risk here? Time to spread a bit of it--very gently, I might add--to the borrowers.http://www.businessinsider.com/c/51502f1169bedd2264000016jimnearMon, 25 Mar 2013 07:03:45 -0400http://www.businessinsider.com/c/51502f1169bedd2264000016
In our local real estate market in Charleston SC, we are seeing people moving in from the North East and young college graduates purchasing homes. The young people have been living at home with Mom and Dad until they could get a good job. Now there are jobs and they are buying homes. New jobs = housing growth.http://www.businessinsider.com/c/514d1d0869bedded68000012ZekeFri, 22 Mar 2013 23:10:00 -0400http://www.businessinsider.com/c/514d1d0869bedded68000012
Ok, here's the deal: this guy focuses on a few markets and generalizes. Who is this guy? The article is wrong outside of a few markets, and maybe wrong in those for all I know. Hey guy, what's your experience? Why should we take you seriously? I've been in the business for 6 years and I dion't see anything like what you are suggesting.http://www.businessinsider.com/c/514cc42069bedd7e1100000bdiana brownFri, 22 Mar 2013 16:50:40 -0400http://www.businessinsider.com/c/514cc42069bedd7e1100000b
Suggestion: Public, be discerning about what you see here. A healthy housing market is dependent on a healthy economy and job market. There are many ways to spin this so be clever enough to spin it to your advantage and look beyond the providers of services position.http://www.businessinsider.com/c/514b6e976bb3f7921f000003Dave MowersThu, 21 Mar 2013 16:33:27 -0400http://www.businessinsider.com/c/514b6e976bb3f7921f000003
Except for the first time in U.S. history investors and banks were bailed out buying the bonds thereby owning the homes which are then only sold to billionaires and for an 85% discount to market so the only people who get any opportunity are the rich. That'll sure help with the wage gap and joblessness.
Soon, the rich will be running for their lives.http://www.businessinsider.com/c/514b167869beddae46000008Tim ThorntonThu, 21 Mar 2013 10:17:28 -0400http://www.businessinsider.com/c/514b167869beddae46000008
Housing is never just a "zero sum game". Yes, it may be in such in a falling market place, but real estate is always local. Talking about Real Estate in grand terms is a common business blunder and part of the reason why we are in the mess that we are in today. Any time you throw all your analysis in a bucket and blindly pull out a piece of paper and say "if it is true somewhere, it is true everywhere..." you fail. This is poor business for individuals, for businesses and for our nation.
Calling real estate a zero sum game precludes population growth, family formation and changes in economic times and regions. Yes, there are some times "winners and losers" when the economy of a certain areas changes in favor of another region, but this is not the only time or place that real estate changes hands.
Austin Real Estate Secretshttp://www.businessinsider.com/c/514aefd06bb3f7742a00000eblutownThu, 21 Mar 2013 07:32:32 -0400http://www.businessinsider.com/c/514aefd06bb3f7742a00000e
doubtfulhttp://www.businessinsider.com/c/51491f71ecad040942000002newworldorderTue, 19 Mar 2013 22:31:13 -0400http://www.businessinsider.com/c/51491f71ecad040942000002
We are just seeing 100 years of gradual conversion from a metal convertible currency to a fully floating international system of purely fiat currencies.
There is really no reason to pay anyone interest on a commodity (USD) that can be created or destroyed according to need by the banking system.
If the policy is to reduce the value of a currency in terms of purchasing in one country that can be done or in all countries across the globe.
Gradually the optimal level of employment falls due to automation and the redistribution of manufacturing and other jobs. The Fed seeks to optimize not maximize employment to some past level.http://www.businessinsider.com/c/5148b199eab8ea870a000014newworldorderTue, 19 Mar 2013 14:42:33 -0400http://www.businessinsider.com/c/5148b199eab8ea870a000014
All currencies are pure fiat now and as such are abstract symbols only. The printing of actual paper is technically redundant like printing books on actual paper though for reasons of taste older citizens may prefer antiquated media.
Music CDs are redundant and all physical instantiations of data/information.
Money now is entirely digital and must be created on computers within the banks and at the Federal Reserve. It is also destroyed at the Fed in cases where the number of units available are deemed excessive.
It is clear that soon average individual annual income will be drawn from private sources such as wages and from government sources in terms of public goods and entitlement payments. Entitlements including SS, DI, Med.. and all the others will cross the 20% line soon. The "average" US resident will draw 20% of their income from entitlements. (18-19% currently?)
Most new money in the US is created by private banks and the Fed itself is a kind of hybrid special purpose bank/banking regulator. There is no operational need to alter this arrangement at the current time. That low information citizens may call for the end of central banking is of no relevance any more than a call to end air travel or electric lighting.
The UST can issue currency and has in the past but is unlikely to as international policy convergence is achieved largely through the central banks of the major powers so the Fed will stay open.
It is not possible to return to the Past in any, way, shape or form because it does not exist except as a narrative in a person's mind. The majority of people will not work in the future because machines can do all the needed work at much higher rates of productivity and quality. Unemployment is largely a psychosocial issue.
The levels of support will be set to clear global markets of all goods and services that are offered for sale and as 2.5 billion still lack food, water and other basics and 2 billion will arrive imminently there is no concern for lack of markets.
The prospects for the Human Future have never been brighter than they are today so no matter how grim things seem to be to you in 2013 they were exponentially worse in 1813. The glories of the USA circa 1946-1971 are largely the product of a golden haze in the minds of senior citizens and the collectors of old vinyl records.
Currently we know crete an amount of data every 2 years equivalent to all data/knowledge accumulated from every year prior to 2003. Get ready for 2015 as the good news is just getting started.http://www.businessinsider.com/c/5148a9ceeab8ea6c77000006sonofbubbaTue, 19 Mar 2013 14:09:18 -0400http://www.businessinsider.com/c/5148a9ceeab8ea6c77000006
Should I have concerns when I read that "Institutions" made up 19% of purchases? Do a looong stretch of events with me, but on a larger scale, would a continuation of this translate into the 21st century version of the company town? For whoever can't afford to ever buy? I just see it as: the greater the concentration of ownership into fewer hands, the greater the potential for essentially economic oppression & abuse.http://www.businessinsider.com/c/51489c6cecad043b4a000008ChrisTue, 19 Mar 2013 13:12:12 -0400http://www.businessinsider.com/c/51489c6cecad043b4a000008
The family who I bought my condo from paid $300k for it in 2004. I bought it from them on short-sale in 2008 for $125k. There are always winners and losers in capitalism. It's neither good nor evil, right nor wrong. It's just how the markets work. No need to pass socialist laws to help keep people in their homes if they made an unwise financial decision. People should be forced to live and die by their choices and mistakes. No mercy. No compassion. No bail-outs.http://www.businessinsider.com/c/51488fef6bb3f7ea2300000fgirlinworldTue, 19 Mar 2013 12:18:55 -0400http://www.businessinsider.com/c/51488fef6bb3f7ea2300000f
I really hope you're wrong.
Note: it is interesting how someone may post something provocative or intelligent, only to totally ruin it by making an asinine remark about the political aspect of the spectrum they disagree with, attributing all ills to it with no basis, rationale or substance.http://www.businessinsider.com/c/51488b6b6bb3f7831f000002hammermanTue, 19 Mar 2013 11:59:39 -0400http://www.businessinsider.com/c/51488b6b6bb3f7831f000002
Zillow? really? The one place that makes money on home listsings as a source.
Show me a place where the mortgage is a 1/3 of the rental price? The only way your example would hold water is if it was in a palce that NO ONE would buy or in a poor location becuase they know they will never see and ROI on it.
Add taxes, HOAs (if they have em), cost to maintain the place, utlities and appropriate for the HVAC and exterior. Your break even point might be 7+ years down the road. But hope that your job, your family or anythign else remain the same. For maybe your pruchase price. Also assuming that in 7+ years the decor is not outdated; if it is add that cost to your "investment".
Do you really think the fed CAN or WILL recreate the fannie/AIG/freddie environment again?
1) jobs need to be back
2) pay has to be higher
3) population control plays a huge roll
4) laws are different
5) lending is different.
by the time these things happen and in a magical time traveling world where the assumptions of above are all true were looking at maybe another bubble in 25 years wher housing would be worth borrowing money for to bulid wealth....othweise a house is a place to live..
take a look what warren buffet did this year...the man doesnt make a move without manipulating the outcome. Should give you a good idea of what will happen to housing.
<a href="http://www.businessinsider.com/warren-buffett-brookfield-asset-managment-housing-2012-10" target="_blank" rel="nofollow" >http://www.businessinsider.com/warren-buffett-brookfield-asset-managment-housing-2012-10</a>
He put tons of money into other failing industries becuase he KNEW they were going to fail. a combonation of shorting and gov bailout made him even richer...http://www.businessinsider.com/c/51488b4e69bedd394300000dtodddTue, 19 Mar 2013 11:59:10 -0400http://www.businessinsider.com/c/51488b4e69bedd394300000d
We have a bubble-stimulated economy. But the fed rate is now at 0%, ya can't stimulate no more!
Look at the history of the fed. Any time the economy started to falter, the fed rate juiced employment. Just do a map of the fed rate over the employment rate.
It reads like steps going down and down to 0%, each time producing a little juice in the economy.
We're at the bottom of the steps. It's different this time.http://www.businessinsider.com/c/51488a276bb3f76e1d000007todddTue, 19 Mar 2013 11:54:15 -0400http://www.businessinsider.com/c/51488a276bb3f76e1d000007
It's the money being lent out at 0% to banks that then lend it out to investors at low rates.
If the Fed Rate went to 8%, these people wouldn't have cheap money to throw around any more.
We have have a fake economy. What's the scariest to me is how for the bottom 80% money is like gold. Because wages are extremely low, their net worth is negative, jobs are difficult to get, inflation is rising, they can't get borrowing unless it's from Payday Loans for 50% per month, and the savings in their bank is getting 0.000001% return.
On the other hand, for the top 20%, money is like dirt. They have all the money. They have money in stocks. They can borrow at 0% whatever they want. They own gold and silver. They have large incomes. And they've had tax cuts for the last 15 years on their investment income.
It's just scary how disparate the two worlds are. Imagine how the bottom 80% would feel if suddenly China were to dump their US dollars? Imagine all the people that have worked their ASS off for years and years, and their money is suddenly worthless.
The system is rigged for the wealthy.http://www.businessinsider.com/c/514887f1ecad046d23000027todddTue, 19 Mar 2013 11:44:49 -0400http://www.businessinsider.com/c/514887f1ecad046d23000027
Right now you have a scenario comparable to China buying US bonds to keep the dollar up, in real estate.
Renters have to keep buying houses or the depreciation in housing will simply make rents vs owning look ridiculous. In my area we are a downward spiral, now we have tons of foreclosures at very low prices, and so rentals remain vacant. Why pay $1000 for rent when you can own for $100/month? Seriously, at the prices now, you can even consider a house as a consumable good!! Just buy it, pay the mortgage off, then give it away after 5-10 years.http://www.businessinsider.com/c/5148862decad04a220000008todddTue, 19 Mar 2013 11:37:17 -0400http://www.businessinsider.com/c/5148862decad04a220000008
Housing will always be an investment. It just happens that right now, it's not a very good investment.
When you look on Zillow and it says "Rent cost: $1000" and "Mortgage payment: $300".....tell me it's not an investment.
The best way to look at housing is via the job market. People seem to think housing prices work in a vacuum.
One could get worried about all this investor buying for housing and creation of rentals. But I'm pretty bearish on the economy as a whole, so I look at it in a positive light....these suckers will be paying property taxes and notably higher property taxes than homesteaders. Thanks for helping out!http://www.businessinsider.com/c/514876d7eab8ea4103000008DOODLETue, 19 Mar 2013 10:31:51 -0400http://www.businessinsider.com/c/514876d7eab8ea4103000008
sounds like everyone getting out alive- a govt rental to funds that produces profit for all is a trend since all factors right for increasing value- market is early- weather hasn't even brought out flowers--- then what ? with so many multiple buyers bids--looks good IF we can see "buying up / quick turnover mkt" then it's ALIVEhttp://www.businessinsider.com/c/5148764169bedd9e1000000epontiusTue, 19 Mar 2013 10:29:21 -0400http://www.businessinsider.com/c/5148764169bedd9e1000000e
Disagree. The educated class did not procreate, and the ideas of the enlightenment and of democracy will die with them. In 100 years or less it will just be the oligarchs (with the apparatus of government), and the poor. Soon enough the central planners will be done with the pretense of accounting. An authority will exist to bestow digital credits to the peons who flip burgers and unclog sewage pipes, but it won't be a banker. Just a benevolent authority, a great Oz, possibly viewed as a god, dispensing stingy little amounts of digital credits to the peons like manna from heaven. It will be a high tech version of the Aztec society or pharonic society, a beehive type of economy and social organization- everyone serving a fat elite. That's what the progressive movement and technocracy is really about- restoring things to how they were 5,000 years ago.http://www.businessinsider.com/c/514871b36bb3f7656b000010Darryl StrawberryTue, 19 Mar 2013 10:09:55 -0400http://www.businessinsider.com/c/514871b36bb3f7656b000010
A new housing bubble is a feature (of Fed policy) not a bug. With wages stagnant or declining for most Americans, the only grist for the economic mill is debt. Since few have any disposable income and most of their "wealth" is tied up in housing, a ZIRP-driven bubble reinflating real estate (and the monster called HELOC) is the only way John Q. Public can start spending again. But, hey, "this time is different."http://www.businessinsider.com/c/514870d96bb3f7746b00000fJohn1025Tue, 19 Mar 2013 10:06:17 -0400http://www.businessinsider.com/c/514870d96bb3f7746b00000f
The Fed's "flood of money" is all in the reserve system, not in any place that one can buy real estate or stocks or anything else. The "flood of money" is NOT in the money supply. It is electronically generated numbers on a spread sheet we call the reserve system.http://www.businessinsider.com/c/51486d72ecad04bc70000017Sam_CookeTue, 19 Mar 2013 09:51:46 -0400http://www.businessinsider.com/c/51486d72ecad04bc70000017
Smaller companies followed Blackstone's course. Regretfully for many they're being slammed into a brick wall. In my area dozens of foreclosures have been purchased, renovated with the intention of renting only to be rejected do to building code. My area is R1 - single family residential. Strictly prohibits buying for rental purposes. They've tried to sue the municipality and have lost. In theory it sounds like a money making opportunity. In practicality you've got real estate on the balance sheet sitting empty. I encourage anyone who is faced with the same scenario to oppose. You bought you home so you didn't have to live amongst renters. Fight hard against it and you'll prevail.http://www.businessinsider.com/c/51486cc7ecad04a26e00002emt kellerTue, 19 Mar 2013 09:48:55 -0400http://www.businessinsider.com/c/51486cc7ecad04a26e00002e
No no no ! It's always time to buy (ask any realtor). Buy now, and you can sing along .....
"It's time to play the music
It's time to light the lights
It's time to meet the muppets
On the the muppet show tonight
It's time to put on makeup
It's time to dress up right
It's time to raise the curtain
On the muppet show tonight"http://www.businessinsider.com/c/51486be16bb3f78a60000013Aqua BuddhaTue, 19 Mar 2013 09:45:05 -0400http://www.businessinsider.com/c/51486be16bb3f78a60000013
These are not "Normal" times. In Las Vegas there are still over 65,000 homes without utilities services. Most of these are Black Bank Inventory homes that will be dumped on the market when there are fewer people as a percentage of the population working than ever before.
Doom on You!http://www.businessinsider.com/c/51486913ecad04e76500001anewworldorderTue, 19 Mar 2013 09:33:07 -0400http://www.businessinsider.com/c/51486913ecad04e76500001a
Become a Fed supporter as central banking is a permanent feature of a High Tech Society inside and outside the USA. You will be unable to live to see it even if you last 1000s of more years.
It may be renamed but the functions will remain as well as the operational approaches.http://www.businessinsider.com/c/5148674eeab8eaaf5f000009Jungle JimTue, 19 Mar 2013 09:25:34 -0400http://www.businessinsider.com/c/5148674eeab8eaaf5f000009
One of these days, everyone will come to understand that the Fed is not the solution to our problem, it IS the problem. I only hope that I live to see it.http://www.businessinsider.com/c/514866fb69bedd4768000004hammermanTue, 19 Mar 2013 09:24:11 -0400http://www.businessinsider.com/c/514866fb69bedd4768000004
I wish people who dont understand markets would shutup about housing.
The game is different today then even 2 years ago.
Buy a house if:
1) You plan on staying there for the next 10-15 years and the property will fit the lifestyle over that time period (Kids? Job change? relocation? change of scene?)
2) A housing isnt an investment anymore. Where some people are living in the same units with the same upgrades but one paid $50k less for his or hers. Some people are upside down a lot, some are only a little.
3) Keep in mind taxes have nowhere to go but UP, HOA's will go UP, cost of goods (furnace, AC, roof, serious repairs will go UP, infllation will go UP. Yes rent price will usually be high enough to off set these things: ASSUMING the rental has updated HVAC, Roofing and everything else.
The issue with buying in todays market is finding a place for cheap but is updated enough that you wont have to renovate again. I've seen tons of cheap housing in desirable areas, but the issue is the entire house has to be gutted to even remain competitive.
Prices will still fall or Rent will cap.http://www.businessinsider.com/c/5148665c6bb3f77c5500000amike24321Tue, 19 Mar 2013 09:21:32 -0400http://www.businessinsider.com/c/5148665c6bb3f77c5500000a
Regular Joe can get a mortgage once interest rates start to rise, and when that happens property prices will drop again.http://www.businessinsider.com/c/514865a369bedd7768000006just sayin'Tue, 19 Mar 2013 09:18:27 -0400http://www.businessinsider.com/c/514865a369bedd7768000006
recovery in the housing market has to be organic....meaning no fed/false money. until a regular joe can get a mortgage with a blip or two on a credit report, there will be no sustainable recoveryhttp://www.businessinsider.com/c/51485b876bb3f7bb4100002aDean WormerTue, 19 Mar 2013 08:35:19 -0400http://www.businessinsider.com/c/51485b876bb3f7bb4100002a
Essentially a short covering rally. Get ready for the double bottom.http://www.businessinsider.com/c/5148586769bedd3c43000008barbacoaTue, 19 Mar 2013 08:21:59 -0400http://www.businessinsider.com/c/5148586769bedd3c43000008
This is normal behavior. When people are foreclosed upon, they become renters. As the number of renters rises rents rise. As foreclosures rise, property prices drop. The process is now reversing. As that happens, rents will drop and property values will rise.
Caution though: If you are purchasing houses to rent out now, you may be the chump in this whole deal.